Four possible outcomes for West Ham takeover as Daniel Kretinsky’s historic £3.5bn deal in peril

Add as preferred source on Google

West Ham co-owner Daniel Kretinsky is facing a monumental battle amid the latest developments in his business empire.

The Czech billionaire, who owns a 27 per cent stake in the Hammers, has a portfolio which spans multiple different industries and geographies.

And he appears to be ramping up his acquisition strategy, with two major takeovers now on the cards.

The first, of embattled French IT firm Atos, could see Kretinsky invest almost £600m. The stakes are even higher in Kretinsky’s bid to buy Royal Mail, in whom he already owns a large minority stake.

Royal Mail are believed to be ready to accept a £3.5billion offer from Kretinsky. But pressure from some shareholders and unions means the deal is far from a foregone conclusion.

And now, as reported by Bloomberg, the takeover will also likely be scrutinised politically ahead of the general election on 4 July.

What might this mean for West Ham, for whom Kretinsky has the option to complete a full takeover at a set price? Let’s take a look at some of the possible outcomes.

• READ MORE: West Ham told to pay £21m for striker that broke Didier Drogba record against Liverpool in 2023

Outcome 1: Deal goes through, Kretinsky abandons West Ham takeover

If Kretinsky’s mega-money acquisition goes through, running the company will place huge strain on both his time and his resources.

The postal service has recorded almost £550m worth of losses in the last two financial years alone, and turning around its fortunes will likely not leave much time for Kretinsky to become more involved at the London Stadium.

Kretinsky will also be under intense scrutiny if he takes control of Royal Mail which, even in spite of unprecedentedly bad publicity in recent months, is a British institution. That would only increase the pressure on the owner.

And, in simple financial terms, the Czech may need to reallocate funds that he may have once reserved for a West Ham takeover to bankroll the company’s losses, which will not be wiped out overnight.

Outcome 2: Deal collapses, Kretinsky returns focus to West Ham takeover

This is probably the desired outcome for most West Ham supporters eager to see the back of the old GSB regime.

While Kretinsky will be speaking to creditors to finance the Royal Mail takeover, the deal’s collapse would free up his huge cash reserves.

The 48-year-old clearly has at least some desire to increase his stake in West Ham. Why else would include a put and call agreement in his original deal to buy his 27 per cent stake?

In the event that the takeover fails, he could well pivot and turn his attention to West Ham, just six miles down the road from Royal Mail HQ.

Kretinsky has investments in a number of sports assets and his attempt to buy Atos, who hold a number of crucial contracts for the Pairs Olympics, indicates that he still has a big interest in the sector.

After all, a Premier League takeover is the ultimate acquisition in sports.

Outcome 3: Deal goes through, Kretinsky increases West Ham investment

In this scenario, Kretinsky’s Royal Mail bid is a success and he uses the momentum to also action a full takeover of West Ham.

This seems unlikely. But Kretinsky unpredictable approach to investing hasn’t earned him the moniker ‘the Czech Sphinx’ for no reason.

You might initially question whether he and his team would have the energy and bandwidth to immediately turn his attention to a West Ham takeover after a protracted saga with the Royal Mail.

But the nature of the put and call agreement with the current ownership, which was agreed at a set price, means that it would be a far more straightforward affair than a complex acquisition like the Royal Mail.

The cultural and political capital the entrepeneur would access from taking charge of the institition could also benefit West Ham by proxy.

This could help if they ever wish to buy the London Stadium from its publicly-funded landlords.

There could also be opportunities for strategic sponsorships between the Irons and Royal Mail. The London Stadium still has a vacancy for a naming rights partner, for example.

Outcome 4: Deal collapses, Kretinsky forced to abandon West Ham takeover

There will be a lot of collateral damage if Kretinsky fails to acquire Royal Mail. He has invested huge sums into trying to make a deal happen.

In this scenario, he could either maintain the status quo at West Ham or even consider selling his stake in the medium term.